\u3000\u3000 Zhejiang Founder Motor Co.Ltd(002196) (002196)
Event: the company released the performance forecast for 2021: the company expects to achieve a revenue of 1.85 billion yuan – 1.9 billion yuan in 2021, with a year-on-year growth rate of more than 60%, a net profit attributable to the parent of 18 million yuan – 27 million yuan, and a loss of about 115 million yuan – 124 million yuan after deducting non scale net profit.
Q4 high revenue growth and rising raw materials affect profitability. In 2021, the company shipped more than 400000 drive motors. It is estimated that the business revenue of new energy vehicle drive motors will be about 800 million yuan, with a year-on-year increase of more than 250%; The traditional business income exceeded about 1 billion yuan, with a year-on-year increase of more than 10%. According to the performance forecast, the revenue of single Q4 in 2021 is about 550 million yuan – 600 million yuan, with a year-on-year increase of more than 30%, mainly contributing to the high growth of new energy vehicle drive motor. Among the raw materials of the drive motor, silicon steel sheet, copper, aluminum and other raw materials are mainly used, and each material accounts for 10-30%. The previous pricing of the superimposed drive motor is generally based on the year. Therefore, the revenue of the company’s drive motor business will grow rapidly in 2021, but the profitability will be greatly affected by the raw materials.
The proportion of medium and high-end customers has increased, and the profit inflection point in 2022 can be expected. According to the company’s announcement, based on the company’s original customers such as SAIC GM Wuling and Geely, the company has expanded a number of new forces and independent brand projects including Xiaopeng, Weilai and great wall, and is still expanding China’s main new forces and independent brand car enterprises. The proportion of high-power drive motors supporting medium and high-end models is expected to accelerate. In 2022, the company is expected to transmit downward the pressure of the price rise of some raw materials. The price rise of the company’s driving motor products is highly deterministic, superimposed with the gradual increase of the proportion of medium and high-end products. In 2022, the company is expected to achieve a profit turning point, and gradually expand China’s main new forces and strong independent customers, and the market share is expected to continue to increase.
R & D investment continues to increase, with obvious technical advantages. The company’s q1-q3 R & D expenses in 2019, 2020 and 2021 are 83 million yuan, 119 million yuan and 114 million yuan respectively, and the average R & D expenses in a single quarter of each year are about 21 million yuan, 30 million yuan and 38 million yuan respectively. The company’s R & D investment mainly focuses on the industrialization of flat wire motor, round wire oil cooler, 8-layer high-voltage flat wire motor, high-voltage three in one and controller Silicon carbide ultra-high pressure electric control and electric drive platform, etc. Compared with its peers, the company has obvious advantages in technical indicators such as power density and motor efficiency, and has large-scale mass production capacity.
Scale effect and high-end products, profitability is expected to improve. According to the company’s announcement, the company has an existing production capacity of more than 500000 units, plans to expand the production of 1 million drive motors, with a total investment of about 500 million yuan, and is expected to continue to increase the production expansion plan with the high scenery of the downstream. The factors driving the high growth of motor include: 1) the expansion of new customers, including lemon chaos models of Xiaopeng, Weilai and great wall, and is expected to continue to expand other new powerful car enterprises and strong independent brands in China; 2) The product structure has been improved, from the 20kW motors of some A00 cars to the motors with a new power of nearly 200kW, and the value of the motors has been significantly improved; 3) The proportion of dual motor models has increased, and the company’s supporting new forces and independent brand models have expanded from single motor to dual motor; 4) The penetration rate of new energy vehicles accelerated.
On the whole, due to the high prospect of the industry and the obvious rise of raw materials, the pressure on the cost side can be transmitted to the downstream, superimposed with the expansion of new customers and the improvement of product structure, the inflection point of the company’s profitability in 2022 can be expected.
Investment suggestion: we estimate that the company’s operating revenue from 2021 to 2023 will be RMB 1.725 billion, RMB 2.795 billion and RMB 4.751 billion respectively, and the net profit will be RMB 20 million, RMB 175 million and RMB 319 million respectively. The corresponding EPS will be RMB 0.04, RMB 0.35 and RMB 0.64/share respectively. At present, the corresponding PE share price is 285, 33 and 18 times. The inflection point of the company’s performance is clear, the “Buy-A” rating is maintained, and the six-month target price is 15 yuan / share.
Risk warning: the sales volume of new energy is lower than the expected risk; Risk that customer expansion is less than expected; Flat wire motor penetration is less than expected risk.
